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All Forum Posts by: James H.

James H. has started 24 posts and replied 135 times.

Post: What has been your SCARIEST land-lording or investing moment?

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62
This is actually not the first or second or third time we've used the same banker.  Very happy with rates, etc.  But, the closing process is always a nightmare.  We have been working with him for more than 2 months this time around.

Originally posted by @James H.:
I am cautiously optimistic.  He wrote me earlier about an hour after posting that he can do a rate/term loan -- meaning that he can pay the HML but not do 75%.  Then, in 6 months or so, he can do the rest up to 75%.

We are also scraping around to see if we can show another $5000 somehow.  Maybe a JTROS account or the account we save charity money in... Or the account where property tax money is saved...  Maybe...

:-)

Originally posted by @Shiloh Lundahl:

@James H. That is an awful story. How many banks have you looked into. When a banker says that you can't do something it usually means that they can't do something. To give some perspective, we have purchased 12 properties this year in series LLCs and we have gotten 75% loans on each of them with a small, local bank that does commercial loans. I would highly suggest connecting with other investors in your market that have buy and hold properties in their LLC's name and networking with them to find out which banks work best with investors on these types of loans. I found this bank through a fellow investor.

I hope this story can have a happy ending.

Post: What has been your SCARIEST land-lording or investing moment?

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62
I am cautiously optimistic.  He wrote me earlier about an hour after posting that he can do a rate/term loan -- meaning that he can pay the HML but not do 75%.  Then, in 6 months or so, he can do the rest up to 75%.

We are also scraping around to see if we can show another $5000 somehow.  Maybe a JTROS account or the account we save charity money in... Or the account where property tax money is saved...  Maybe...

:-)

Originally posted by @Shiloh Lundahl:

@James H. That is an awful story. How many banks have you looked into. When a banker says that you can't do something it usually means that they can't do something. To give some perspective, we have purchased 12 properties this year in series LLCs and we have gotten 75% loans on each of them with a small, local bank that does commercial loans. I would highly suggest connecting with other investors in your market that have buy and hold properties in their LLC's name and networking with them to find out which banks work best with investors on these types of loans. I found this bank through a fellow investor.

I hope this story can have a happy ending.

Post: What has been your SCARIEST land-lording or investing moment?

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62

Yep... Going through it right now... Have a HML on a home that was going to be a flip. But, the rehab ended up being a bit too high for a flip. It is a decent BRRRR, though.

Cannot rent the home under the terms of the HML.

We went to refinance and were told after 3 weeks of messing around that we could not because the home was purchased under a LLC and residential loans have to be in our personal names. So, we would have to sell the home from the LLC to ourselves, personally. (Sale vs refi).

After 6 more weeks of a paperwork and foot dragging, we were finally told today that we have to have funds in our personal accounts to "close" even though the transaction will be a cash back transaction.  The amount of liquid funds required is 20% of the appraised value.  We are about $5000 short.  Gifts will not work.  And $30K in another LLC account will not work because the other LLC's name is too similar to the name of the LLC that owns the home.  (Series LLC.)

If the transaction went through, we would get $50K back at closing.  Makes not sense.  But, apparently these are Freddie/Fannie rules.


So, it looks like we are stuck putting the home on the market at the WRONG time of the year and selling a nice cash flowing rental for a loss.  We even have a tenant who is waiting...

Post: Applicant offers to pre-pay a year's rent in cash

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62

My Dad let a tenant do that about 30 years ago.  The tenant drove two brand new Mercedes' and paid 2 years of rent with $100 bills.  I think he lasted about 9 months before he was arrested for being a bookie.  Fortunately, he was a "nice guy" and wrote a apologetic letter announcing that he was vacating the property for legal reasons and was not going to seek a refund.

Do not ever take the chance that you will be so lucky...

Post: Direct Mailer Question

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62

Write them by hand.  Photocopy them in color.  Put them in an envelope and tape them on every door.  That is the cheapest way in a condo complex and is the most effective too.

Post: Texas Eviction for a New Purchase

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62
He would not take it!  LOL!

Originally posted by @Greg H.:

@James H.

30 years is quite a career ! 

Did her pimp use the income approach for his valuation ?

Sorry I had to say it

On the squatter's rights.  Being a tenant for 30 years does not give anyone ownership rights.  Any adverse possession claim would include the paying of property taxes as well

Obviously we have no idea of the terms of your deal but maybe you could wholesale it to the pimp for a few $$

Post: Texas Eviction for a New Purchase

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62

I got the guts to go out and visit her this morning.  The occupants of the home were the female "tenant" and a pimp.  I caught them when neither was high, drunk, or hung over.  They were shocked and so scared that they were highly cooperative.  They would not let me into the house.  But, they showed me the fact that raw sewage was pumped to the outside (no septic.)  And how the roof was built with 2x4's as rafters and joists.  They told me that the ceiling in the bathroom at fallen in and that the sky was visible from the toilet.  And... and...  It really is not economically feasible to salvage the home.  The pimp told me that, at most, the property was worth $2000.   The trusted contractor who accompanied me discussed the situation with me for about an hour and we both came to the same conclusion.

As I pulled away, the tenant came over to me in tears and told me that she would love to work with me to purchase the home from me or rent it.  She told me that the present owner had given it to her in return for on-going prostitution services and that he had never transferred it officially to her name after he got mad at her.


The county will end up taking the home at some point for unpaid taxes.  But, I bet she stays in there quite a while.  I certainly will not be buying the home even if it means losing the earnest money.  (I have one possible out - non inspection related - as well as concern about squatters rights since it turns out that she has lived in the home for 30 years rent free...)

Post: What's your MOST Creative Finance Story?

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62

Build good credit over several years.  Don't run your debts up.  Borrow the down payment money and let it season for 3 months in your bank account before applying for a mortgage.

We bought our first home that way and recently borrowed an entire year's salary, UNSECURED, for more down payments.

Post: Texas Eviction for a New Purchase

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62


Ok...  So, here is the deal.  No written lease.  The "tenant" moved into the property in 2008.  She paid $300 per month for 3 or 4 months and has not paid since.  The current owner says that he has told her several times to leave but does not have the knowledge, energy, etc., to fight her legally.

Closing next week...  I think I am going to just give her a 3 day notice to move and then file with the JP court for eviction.  Sound OK @Greg H. ?

This is going to be an interesting ride.  We have always worked with upper middle class rentals.  This is a $10K sale of a home in an unincorporated rural community.  The "tenant" has a string of drug convictions, DWIs, etc...

Post: Texas Eviction for a New Purchase

James H.Posted
  • Investor
  • Dallas, TX
  • Posts 135
  • Votes 62

Before I waste my time going down to the court to file...

We are purchasing a home next week from a worn out landlord.  It comes with an existing, problem, tenant who has not paid rent for a year. 

Can we file with the court for eviction immediately upon closing ?  Or do we have to give her 30 days notice first?  I know that, before filing with the court, we have to give her a pay or quit notice...

She either has no written lease at all - or a month to month lease.  I suspect that there is no written lease; I am going to find out in a few minutes.

Thanks,

Jim